Portugal no longer on the overseas investors map

The President of Portugal’s estate agents’ association has warned that overseas investors looking to buy property in Portugal because of the country’s generous tax incentives will now likely look elsewhere after the government’s announcement to shelve the Non-Habitual Residents scheme next year.

In an interview with Jornal Económico, Paulo Caiado, President of APEMIP – Association of Estate Agency Companies and Professionals said: “It’s taking Portugal off the map of potential investment from overseas citizens seeking a specific country because I offers greater tax advantages”.

Paulo Caiado said that the sector had not been expecting the measure announced on Wednesday by Prime Minister António Costa that benefited workers and pensioners through generous tax breaks under the NHR regime such as a flat rate of 20% tax for eligible professions and 10% for pensioners who come from a country with a double taxation agreement.

However, he said that he believed that “people who are interested in Portugal will continue to be so”, and that “despite the (tax) regime providing some boost (to the economy) and clearly some additional incentive for people investing in the country”, the sector never saw it as a “special accelerator” for investment attraction.

The representative of Portugal’s estate agency sector again hammered the government’s policy on housing saying that the solution to a lack of housing, and specifically affordable housing, wouldn’t be solved by scrapping or restricting everything to do with economic activity (meaning the NHR, Local Accommodation and Golden Visa schemes).

“Over a decade €7Bn (of investment) came into Portugal. The Golden Visas represented 0.6% of the number of transactions and had nothing to do what had happened. (property inflation)

“Total foreign investment (in property) represented a little under 6% of the number of transactions made in Portugal”, said Paulo Caiado.

And according to a report on tax expenditure sent to parliament, tax revenues associated with NHR residents rose 18.5% last year to €1.5Bn. In other words they bring in a substantial amount of money to State coffers in indirect taxes as the State loses in IRS taxes.